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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to how to retire on time, a show that answers your questions about all things retirement, including income, taxes, Social Security, health care, and more. This show is an extension of the book, How to Retire On Time, which you can grab today on Amazon, or you can grab a free copy by going to www.howtoretireontime.com. My name is Mike Decker. I'm the author of the book, How to Retire On Time, but I'm also a licensed financial adviser, insurance agent, and tax professional. When it comes to finance, we can pretty much cover it all.
Mike:Now that said, please remember this is just a show, as in not financial advice. So if you want financial advice, you can always request analysis from our team today by going to www.yourwealthanalysis.com. With me in the studio today is Mr. David Franson. David, thank you for being here.
David:Yeah. Happy to be here as always.
Mike:Yeah. David's gonna read your questions, and I am going to do my best to answer them. You can always submit your questions by texting them to (913) 363-1234. Again, that number, (913) 363-1234, or you can email them to heyMike@howtoretireontime.com. Let's begin.
David:Hey, Mike. Can you retire today with $1,000,000, or is that an outdated benchmark?
Mike:Yeah. The problem with retirement planning and benchmarks is there's two variables. The first variable is how much income do you need, And then the other variable is how much do you have saved?
David:And that's gonna vary greatly by person to person, right? Household to household.
Mike:So I know people that just need $23,000 a month, and they're happy as a clam. Yeah. And guess what? Their social security provides 2,000 of that. Yeah.
Mike:They love and I'm not trying to put on these cliches, but they're typically the person, they don't wanna travel, they enjoy maybe some fishing, they enjoy maybe guarding the back. Like it's a very simple life that doesn't have all these expenditures. And then there are other people that just want to travel more, they wanna do more in life. Some people will say, Well, hey, I wanna just go, go, go for the first five years, and then we're gonna significantly back off. Whatever it is, these are variables that are gonna affect the number that you need to be able to retire on time.
Mike:So look, this is probably gonna rub some people the wrong way. Oh, yeah, brace yourselves. Yeah. Everything you see on Facebook, everything you see on YouTube, the advertising about retirement planning, all the radio ads, all of that stuff. This show that you're listening to right now, it's all marketing, and it's intended to polarize, get your attention, and gain you as a client.
Mike:That's it. Yeah. So when we understand the message that's being given to us, you have to ask yourself, why is that message being given? This may be an overshare, but in my opinion, I think a lot of times that, oh, you need a million dollars to retire is polarizing because they only wanna work with people that have a million dollars or more, because if you have a million dollars or more, you make more money for the same amount of work. Sure.
Mike:So if someone has $500,000 saved up for retirement, the advisor in theory, if the same fee schedule applies, is gonna make half the amount of money for roughly the same amount of work. So I think some of these times, these numbers are thrown out there to be divisive, to filter out people that may or may not be a fit, to create a business efficiency. That's my opinion. I'm not speaking on behalf of other companies. These are things that I've noticed in my decade of being in this industry that frankly kind of bugs me, that's why I do this.
Mike:Maybe I'm Don Quixote here chasing windmills, it's just, what is right for the client, and people need help. So that's why I wanna explain it. Stop beating yourself up. If you don't have anything saved, oh fine. If you have $500,000 saved, fine.
Mike:If you have 30,000,000 saved, if you have 10,000,000 saved, if you have a hundred, how much do you have? How much does it cost to be you, and what are we working with to make that life happen? Maybe you have enough that with a part time job, can bridge the gap. Yeah. Maybe you have nothing saved, you're 50 years old, and you just, you need a good conversation about how to manage your cash flow, and how to expedite the savings in certain ways.
Mike:Let's stop Gosh, what's the appropriate, somewhat politically correct way to say this? Let's stop being divisive. Let's stop being argumentative, and let's just have solution focused conversations. Let's just start helping people. How much does it cost to do our job?
Mike:Who cares about 1% fees or all these crap? Just how much does it cost for us to do our job, that anyone that comes through our door, if they're willing to pay that rate for that service, whether it's for the analysis, whether it's for a plan, a short plan, a long plan, a quick check-in like an oil change, or just some quick guidance, whatever it is. What does that look like? Because this million dollar thing has caused so many people to delay their retirement, it bugs me.
David:Oh, right.
Mike:So many people have spent years delaying their retirement because, well, I need a million dollars and I don't have enough, and so I don't wanna run out of money, so I'm gonna keep delaying it. Wealth is your time and how you spend it. So if you can afford to retire and live the life that you want, and you have less than a million dollars, great. Now, can you have a comfortable retirement on $30,000 No. But we can take that situation and say, okay, here's how you may want to invest.
Mike:Here's what you need to cut from your spending each month to start building some reserves. Yeah. There's been many times where we've worked with people that had $2,000,000 and they were scared to death to retire. So again, it's not the number, it's about how much do you have? How much do you need?
Mike:And can we put together a plan that allows you to live within your emotional and economic limits? Yeah. That you can be comfortable proceeding with controlling your time, so that you're not spending your time in a job that you don't necessarily care for. Maybe you love your job, and if that's the case, keep working, gives you purpose. But if you hate your job, and you do something else, maybe you could retire part time, maybe you could retire full time, but you wanna get a different job, and have some fun with it.
Mike:Yeah. The point is, look, wealth is about time, it's about relationships, it's about doing the things that fulfill you, that give you purpose, not in a selfish way. It's about service, it's about controlling your time. Yeah. So let's take a step back and stop having these arbitrary benchmarks that have no context to your situation, and start having meaningful conversations about what do you need to live the life that you want, and then how do we get to that point?
David:Yeah. So people, they should try and figure out how much is it going to cost to be them in retirement? Like, is that the starting point?
Mike:Yeah. How much do you need to live the life that you want? Yeah. That's the first point. And then the second point then is, okay, what are we working with?
Mike:Do you have rental real estate? Is it profitable? Is it not profitable? Do you qualify for social security? Are you married?
Mike:Are you not married? Do you have anything saved? Where is it saved? A million dollars in an IRA is very different than a million dollars in Roth. A million dollars in non qualified brokerage account is also a very different situation, and all of those plans would be built differently.
David:Right. Good points.
Mike:And so if you have debt, the million dollars is gonna be treated differently with the debt associated with it, because the debt's eating into your cash flow than if you got rid of the debt. Should you pay off the debt? Should you not pay off the debt? So finance is a complicated situation, it's an easy conversation to have, if you laid on the table, and then you start sorting through it. Yeah.
Mike:But you've gotta have the conversation, and be individualistically focused. What are your needs, and what do you have to work with? People typically have what they need to get what they want. It may not be in the time that they want, but they typically can get to where they wanna go. They just need more clarity than these polarizing marketing sales pitches of random oversimplified arbitrary benchmarks that I think do more harm than good.
Mike:That's my final answer.
David:Alright. Thank you.
Mike:Any questions?
David:No. No. I think we got it.
Mike:That's all the time we've got for the show today.
Mike:If you enjoyed the show, consider subscribing to it wherever you get your podcasts. Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles or if you're missing tax minimization opportunities that you may not even know exist. Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility. This is not your ordinary financial analysis.
Mike:Learn more about Your Wealth Analysis and what it could do for you regardless of your age, asset, or target retirement date, go to www.yourwealthanalysis.com today to learn more and get started.